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These Canadian Dividend Stocks Offer a Safe Haven for Your Money

protect, safe, trust
Image source: Getty Images

Written by Daniel Da Costa at The Motley Fool Canada

The market environment over the last year and a half is a great reminder of why investors should have a balanced portfolio. It’s, of course, important to own high-potential growth stocks, but you also want to ensure you own a variety of safe and reliable Canadian dividend stocks that can help protect your money when volatility picks up, and markets become turbulent.

And while there are no stocks you can buy that are 100% safe, there are plenty of defensive and low-risk stocks that you can buy to diversify your investments and ultimately minimize the risk of your portfolio as much as possible.

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So if you’re looking to shore up your portfolio today, here are three safe Canadian dividend stocks to buy now.

An ultra-safe Canadian dividend stock

If you really want to find a low-risk, low-volatility stock that can protect your capital as risk and uncertainty intensify, then a high-quality utility stock like Hydro One (TSX:H) is one of the best to consider, especially with interest rates appearing to peak north and south of the border.

Utility stocks are well-known as some of the safest stocks you can buy due to the fact that the services they offer are so defensive. Whether or not there is a recession, Hydro One can expect to continue to see strong demand for electricity from both residential and commercial customers.

Furthermore, the utility industry is regulated, which lowers the risk even further. Therefore, utility stocks like Hydro One can often predict its revenue and earnings growth years in advance, which is another reason why it and its dividend are considered to be so safe.

And with Hydro One recently increasing its dividend again, the Canadian dividend aristocrat now offers investors a yield of more than 3%.

So if you’re looking for a safe Canadian dividend stock that can protect your capital well in this environment in addition to generating you constantly increasing passive income, Hydro One is one of the top companies to consider today.

A top Canadian REIT that just increased its monthly distribution

Although Hydro One is one of the lowest-risk stocks, the trade-off is that it may not offer very much capital gains potential over the long run, and its dividend yield is just 3%. So if you’re looking for a safe Canadian dividend stock but one that offers slightly higher return potential, CT REIT (TSX:CRT.UN) is an excellent investment to consider today.

The fact that CT REIT operates in the retail real estate industry gives it a bit more risk. However, considering Canadian Tire is the majority owner of CT REIT and its largest tenant, it’s another ultra-safe stock that you can have confidence owning in the current uncertain market environment.

In fact, just like Hydro One, CT REIT also just increased its distribution bringing its dividend growth streak to more than a decade.

Furthermore, investors can buy CT REIT at an attractive discount today, where it trades toward the bottom of its 52-week range and more than 10% off its 52-week high.

Therefore, investors can buy CT REIT today and lock in a yield of roughly 5.6%, which is paid to you monthly. So if you’re looking for a safe haven for your capital that you can commit to owning for years, CT REIT is one of the best Canadian dividend stocks to buy now.

One of the best Canadian dividend stocks to buy and hold for years

Lastly, another high-quality dividend stock that can offer you safety in the current environment but also attractive growth potential over the long haul is Brookfield Infrastructure Partners (TSX:BIP.UN).

Brookfield is an ideal choice because the infrastructure assets it owns are extremely defensive. Furthermore, its portfolio has actually been benefitting from surging inflation over the last year.

Plus, in addition to its ultra-safe assets and the fact that they are diversified all over the world, Brookfield is also constantly looking to recycle capital and find the next undervalued opportunity to invest in.

Therefore, not only does it offer a yield of roughly 4.3% today, but you can also expect those distributions to increase by 5% to 9% each year, making Brookfield one of the best safe Canadian dividend stocks to buy now.

The post These Canadian Dividend Stocks Offer a Safe Haven for Your Money appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Brookfield Infrastructure Partners?

Before you consider Brookfield Infrastructure Partners, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in April 2023... and Brookfield Infrastructure Partners wasn't on the list.

The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 21 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 4/18/23

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Fool contributor Daniel Da Costa has positions in Brookfield Infrastructure Partners. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

2023